Investing in Singapore Properties

“It is not calling it buy but when you sell that makes distinction is the successful to your profit”.

Hence I consistently advise my investors to be certain they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for the 4-year Seller’s Stamp Duty (SSD) that they will have to pay if they sell their property before 4 years.

Once they have determined the amount of finances they are willing to outlay, they will set themselves at a gift by entering the property market and generating residual income from rental yields instead of putting their cash on your bottom line. Based on the current market, I would advise these people keep a lookout for good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, my investors and I are on the same page – we prefer to probably the current low price and put our money in property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of as many as $1500 after off-setting mortgage costs. This equates to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.

Even though prices of private properties have continued to go up despite the economic uncertainty, we can see that the effect of the cooling measures have can lead to a slower rise in prices as in order to 2010.

Currently, we observe that although property prices are holding up, sales are starting to stagnate. I will attribute this on the following 2 reasons:

1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to some higher price.

2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a enhance prices.

I would advise investors to view their Singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in time and trend of value due to the following:

a) Good governance in Singapore

b) Land scarcity in jade scape singapore, and,

c) Inflation which will set and upward pressure on prices

For clients who would like invest in other types of properties besides the residential segment (such as New Launches & Resales), they likewise consider throughout shophouses which likewise assist generate passive income; and thus not controlled by the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the importance of having ‘holding power’. You shouldn’t be expected to sell your property (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.